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Tenant demand is rising although provide is tight in London’s prime markets, driving up yields for landlords, Knight Frank evaluation exhibits.
There have been 12% extra tenants registering in December year-on-year, whereas viewings elevated by 5%.
Nevertheless, the variety of new rental listings in London final yr was 5% decrease than in 2024, with components just like the Renters’ Rights Act prompting landlords to promote.
Jon Reynolds, head of lettings within the north, metropolis and east London area at Knight Frank, mentioned: “The early days of January are busier than we’d usually anticipate, which follows a rally in direction of the top of December.
“There seems to be some positivity available in the market and areas the place inventory ranges are wholesome have seen sturdy enquiry ranges. The sensation in the mean time is one in every of cautious optimism.”
The one part of the market the place the variety of tenancies rose final yr was the super-prime (£5,000+ per week) worth bracket.
It was largely attributable to uncertainty in prime gross sales markets following adjustments to tax guidelines for non doms and wider hypothesis round wealth taxes forward of November’s Funds, which led to extra rich people renting as a substitute of shopping for.
The variety of super-prime tenancies began in 2025 was 17% increased than the earlier yr, Knight Frank information exhibits.
Rents in prime central London rose 1.7% within the yr to December, which compares to an increase of 0.7% recorded in 2024.
In the meantime, a rise of two.5% in prime outer London outstripped the rise of 1.3% seen in 2024.
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